Can Monero (XMR), the largest privacy coin by market value, be tracked? How does the official respond

Previously, Chainalysis, a blockchain analysis company, provided a briefing to the US Internal Revenue Service on how it has been tracking Monero (XMR) transactions since 2021, implying that this privacy focused cryptocurrency can be traced. But a Monero committee member recently refuted such accusations.

According to Decrypt, Csilla Brimer, the head of the Monero community, stated in a statement that the company is able to track transactions using XMR because it has set up its own Monero nodes and uses these nodes to track all IP addresses connected to them.

Csilla Brimer stated that Chainalysis' nodes are essentially 'fake proxy nodes', and the company uses metadata collected from these fake nodes to drive its transaction tracking tool. Csilla Brimer believes that this incident indicates that "Monero users must run their own Monero nodes" or use the privacy focused web browser Tor.

In short, this strategy will not pose a threat to on chain privacy for users who evade these fake nodes or use Tor. In fact, protecting your IP address is key because it is the primary information they can access. Without an IP, they will get nothing

In addition, Csilla Brimer further pointed out that Monero's collaboration with cloud service provider Umbrel allows users to set up their own Monero nodes on their servers or Raspberry Pi, allowing users to send and receive payments without using external nodes, minimizing privacy breaches.

It is worth mentioning that this is not the first time Monero's privacy capabilities have been questioned in 2024. Finnish media MTV Uutiset has claimed that the Finnish National Investigation Agency (KRP) is able to track transactions conducted using XMR.

But Csilla Brimer once again refuted this claim, claiming that any tracking completed by the Finnish investigation agency was due to security breaches by users when converting Bitcoin to Monero.

As of now, Monero remains the world's largest privacy coin with a market value of $3.1 billion.